[miningmx.com] – AQUILA Resources acknowledged there was a risk national elections in South Africa may further delay a hearing into why it has not been awarded a mining permit for its Avontuur manganese project.
The company successfully applied for a prospecting permit for the project, specifically the Gravenhage manganese, in 2006, and then successfully submitted a mining permit application in 2010.
Last year, however, it emerged that a company called Pan African Mining Development Company (PAMDC), which has links to the governments of South Africa, Zimbabwe and Zambia, had been awarded a prospecting right over part of the Gravenhage deposit – a development Aquila threatened to challenge in court.
South Africa’s Department of Mineral Resources (DMR) subsequently suspended PAMDC’s prospecting right pending an internal hearing that was then delayed because the PAMDC had initiated its own legal appeal.
Mike Halliday, South African country head for Aquila Resources, accepted that the appointment of a new mines minister following national elections could result in government missing the regulatory deadline for awarding the mining permit which is the end of May. “I would hope business continues as normal, but there is a risk of that,” he said. Mines minister, Susan Shabangu, has hinted in the last two months that her current term may be her last.
“The DMR has given an undertaking that it will comply with the timelines in the MPRDA [Mineral Resources and Petroleum Development Act]. I don’t know if elections will affect it,” he said. National elections in South Africa are scheduled for May 7.
Aquila Resources is eager to have a mining permit granted as it needs to prove the right to mine before applying for a portion of the re-allocation of the Port Elizabeth export capacity in Transnet’s Manganese Export Capacity Allocation (MECA) process.
In terms of MECA, Transnet business unit, Transnet Freight Rail (TFR), is to expand the capacity of the manganese line from the Northern Cape to the Nggura (Coega) port to eight million tonnes a year (mtpa) from the current 5.5mtpa, said Halliday.
The prize is to participate in the next stage of MECA which envisages expansion of the line to 16mtpa by 2019, enough freight to give scale to the Avontuur project in which Aquila has already spent R450m on exploration since 2006.
“There are other export channels to Richards Bay and Saldanha, but we ideally want to get our foot in the door for the next stage of MECA, and to attract a partner that would secure offtake agreements,” said Halliday.
Halliday said there was little chance of Aquila walking away from its investment. “It’s a good project and we might get enough capacity (on the rail line) so we can at least start the mine,” he said.
Aquila was considering investing up to $480m in South Africa of which $180m would be on the proposed 1.5mtpa Avontuur manganese mine. Aquila said in the past that a further $215m to $300m was being proposed for investment on Thabazimbi, an iron ore prospect containing an estimated 37.1mt in measured resources.
Tony Poli, executive chairman of Aquila Resources, said in a statement on March 11 that the DMR had already missed some regulatory time periods for deciding the appeals. It had “… already failed to meet the first regulatory deadline for responding to PAMDC’s cross-appeal by 4 March 2014,” he said.
“Aquila is disappointed that the DMR was unable to meet its original deadline of mid-January 2014. Failing a positive response to this matter by the end of May 2014, Aquila will take all necessary action to protect its rights,’ he said, raising again the possibility Aquila takes the matter to court.
